Wells Fargo's reputation and legal risks remain elevated as the company continues to manage ramifications of its retail sales practices misconduct. The company has also identified operational control issues in businesses such as auto finance. However, Wells' customer base appears relatively stable, and the company continues to strengthen its management structure, operational controls, and corporate governance. Over the past year, the company has curbed its loan growth (showing signs of a lower risk appetite), posted good earnings, and increased its capital ratios. We assume that any future legal fines or restitution--although potentially large--will be manageable in the context of Wells' robust earnings, which we expect to remain quite strong. We are affirming our 'A/A-1' issuer credit ratings on Wells. The
